Allegheny Plastics

Chances Are Good It Was Made in Cranberry

Look in any supermarket and you’ll find racks of gift cards for restaurant chains, retailers, amusement parks, gas stations, and hundreds of other businesses, artfully arranged and waiting for busy shoppers to snap up along with their household groceries. And just about anywhere you see them on display, chances are that around a third of those cards were manufactured by Allegheny Plastics on Freedom Road in Cranberry Township.

Printing cards is a ferociously competitive business, with razor-thin profit margins, according to Don Ranalli, who has served as president of the company’s Printed Plastics division for the past eight years. Its production requirements are exacting, using a variety of materials and automation techniques to produce the precise visual and tactile impressions their issuers want to create.

That can be tough. Even so, it’s a very attractive business. The retailer whose name is on the card generates new foot traffic.

The gift recipient typically spends a few dollars beyond the card’s value. The banks and specialty companies that process the transactions get their share. So do the supermarkets where they were sold. If there’s just a dollar or two left on a card, many customers simply pitch them, letting the issuer keep the change. And in New Jersey, the state government is trying to muscle in on the action by impounding the unspent money left on old cards.

But even though the names on the cards are familiar ones - Toys R Us, J.C. Penney, Staples, Outback, Gymboree, IHOP, BP, CVS and so on - Allegheny Plastics’ paying customers are almost totally unknown to retail customers. That’s because most of the gift cards, referred to as ‘stored value cards’ by those in the business, are purchased through intermediaries - customers with names like Ceridian, SVS, First Data, InComm, Blackhawk and Global Payments - companies whose business involves processing and reconciling the financial transactions that take place from the moment the card is encoded until it eventually expires.

To get inside their building at Allegheny Plastics, you first have to call, sign in, and be admitted by an authorized employee through a locked lobby door. That’s to minimize the threat of mischief with cards that can be used as cash in many places. Yet the company doesn’t make conventional credit cards in Cranberry, even though their production methods are essentially identical. That’s because producers of MasterCard, Visa and American Express cards are obliged to put even more costly high security provisions in place - requiring background checks of visitors as well as related anti-fraud measures.

But there’s still plenty of business to go around. Cards used as backstage passes, membership cards, loyalty cards, discount cards, bag tags, health insurance cards, hotel door hangers, and lots of other special purpose printed plastics represent roughly half of the company’s business. And it’s a growing business, turning out three times as many cards last year as it did in 2005.

Of course, there are emerging technologies which could someday impact the current surge in gift card use. For example, there are smartphone applications being developed which are likely to replace many current gift card transactions. But Ranalli is confident enough about the company’s future to have spent $3 million on a 15,000 square foot expansion of the plant earlier this year.

Started more than 70 years ago near Leetsdale, privately-held Allegheny Plastics moved its printing division to Cranberry in 1994. It was close enough to allow the company’s employees to commute comfortably to their new Thorn Hill Industrial Park site, and it provided even better access to the Interstate highway system. As a result, task-focused teams inside the company’s workforce - which ranges from 60 to 100 depending on seasonal demand - are now able to produce, code, and move their high-value cards to markets from New York to Chicago in as little as a single day.